New Issue: Morgan Stanley prices $11 million 11.25% HITS exchangeable for XM Satellite Radio

By Jennifer Chiou

New York, April 27 - Morgan Stanley priced $11 million of 11.25% HITS (High Income Trigger Securities) due April 20, 2007 exchangeable for XM Satellite Radio Holdings Inc. stock, according to a FWP filing with the Securities and Exchange Commission.

Payout at maturity will be determined according to the performance of XM Satellite Radio stock up to and including April 18, 2007, the determination date.

If the stock price has not decreased below the trigger level, $14.105 or 65% of the initial share price, investors will receive par. If the stock price has dropped below the trigger price, investors will collect 0.46083 XM Satellite Radio shares.

Issuer:	Morgan Stanley
Issue:	HITS (High Income Trigger Securities) senior medium-term series F notes
Underlying stock:	XM Satellite Radio Holdings Inc.
Amount:	$11 million
Maturity:	April 20, 2007
Coupon:	11.25%, payable quarterly
Price:	Par of $10.00
Initial share price:	$21.70
Payout at maturity:	If the stock price drops below the trigger price, payout is 0.46083 share of XM Satellite Radio stock; otherwise, par
Trigger price:	$14.105, 65% of initial share price
Exchange ratio:	0.46083 shares of XM Satellite Radio stock per HITS
Determination date:	April 18, 2007
Pricing date:	March 24
Settlement date:	March 31
Underwriter:	Morgan Stanley & Co.
Listing:	"XMM" on American Stock Exchange

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